From October 2012, HMRC began implementing a radical change in how payroll information must be reported to them.
Real Time Information (RTI) is aimed at improving the operation of PAYE by closing the “tax gap”, improving the customer experience and reducing costs to HMRC. Whether it will reduce or increase costs for
employers remains to be seen.
If you currently process your payroll inhouse, you will need to make some changes to accommodate RTI. Accounting software will need updating, data – including a monthly Employer Payment Summary – will have to be submitted to HMRC each time you run a payroll, and to avoid submission failures (which could incur costs) information you submit for employees must be correct each time.
What you need to be thinking about:
• What will be the impact on your business processes?
• What do you need to do to prepare?
• When should you start preparing?
• What extra resource will be required?
• Who do you need to involve, e.g. payroll software provider/IT department, BACS approved software service, HR, finance, employees, bureau/agent?
RTI may help to streamline HMRC’s systems, but it could wreak havoc for SMEs as the sheer frequency with which the information must be sent through to HMRC could prove hugely time-consuming and disruptive to employers who have not got their systems set up.
Many businesses are still not prepared for this change, if you are one of them, we are hosting a series of workshops that may be beneficial. For more information, click here.
Alternatively, if you would like further information on how the introduction of RTI may affect your business, please contact our specialist payroll team on 01254 679131.